How to Calculate Sales Revenue in Accounting

by Christopher Carter, Demand Media

A company generates sales revenue as a result of operating activities. These operating activities involve the sale of goods or services to customers. Revenue exists as an account found on a company's income statement, also referred to as a statement of profit and loss. Sales revenue has a normal credit balance, meaning that a credit to a revenue account illustrates an increase in sales. Calculating a company's sales revenue helps determine whether a profit was made or if losses were incurred.

Step 1

Verify the selling price of each unit. The selling price per unit helps a company determine revenue generated from sales. A company that sells multiple items must figure the sale price of each unit to determine revenue from sales. In contrast, a company that sells one product has an easier time of calculating sales revenue.

Step 2

Identify the number of units sold. Determining the number of units sold allows a company to figure the amount of sales revenue generated from operating activities. Companies that sell multiple items must determine the number of units sold for each product.

Multiply the selling price of each unit by the total number of units sold. For example, a company that sells 100 aluminum screws at $1 per screw generates $100 in sales revenue. This calculation indicates the revenue generated by each product sold by a company.

Step 4

Add the revenue generated by each product. For example, if a company has $10,000 in revenues generated by product A and $60,000 in revenues generated by product B, the company has a total sales revenue of $70,000.

About the Author

Christopher Carter loves writing business, health and sports articles. He enjoys finding ways to communicate important information in a meaningful way to others. Carter earned his Bachelor of Science in accounting from Eastern Illinois University.

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